Canada, Mexico sign deals to boost trade, growth, air travel

Canada and Mexico signed a number of agreements Tuesday to boost trade and economic growth between the two countries, including a deal to expand air travel despite an ongoing dispute over Canada’s visa policy for Mexican travellers.

Prime Minister Stephen Harper and Mexican President Enrique Pena Nieto watched as ministers and other stakeholders took turns signing the agreements during a ceremony in Mexico City Tuesday afternoon.

In addition to an updated bilateral air transport agreement, which adds more direct flights between Canadian and Mexican cities for both passengers and cargo and allows for flexibility on pricing, other agreements include:

a memorandum of understanding to enhance co-operation between Export Development Canada and Mexico’s Banco Nacional de Comercio Exterior.

a “master co-operation agreement” to ensure financial support and other assistance for Canadian and Mexican companies in order to boost trade and investment.

a declaration of intent on defence co-operation, which calls for the two countries to work together on North American security issues, as well as military training, defence research and material.

a renewed joint Canada-Mexico action plan to promote the two countries’ “shared values.”

an energy deal that will see Canada assist with regulatory development, technology and environmental monitoring.

“Canada and Mexico have enjoyed 70 years of dynamic diplomatic relations,” Harper said in an address after the signing ceremony and remarks from Pena Nieto.

“But it has really been in the last 20 years that we have seen unparalleled growth in bilateral trade, tourism and investment since the conclusion of the historic North American Free Trade Agreement.”

Bombardier says it has benefitted from NAFTA by being able to build subway cars for international customers for cheaper labour costs, which keeps higher-paying jobs in Canada.

“Having the jobs in Mexico is assuring that the jobs in the States and in Canada can be preserved,” said Alfredo Nolasco Meza, a Bombardier representative in Mexico. “We don’t have to see this as a competition between workers.”

Meanwhile, Harper told a group of Canadian business leaders earlier Tuesday that Canada and Mexico have a “very unbalanced” trade relationship and he’d like to see that change.

Harper said that while the 20-year-old North American Free Trade Agreement has promoted more commerce between Canada and Mexico, it’s been unbalanced.

"Trade flows have gone up enormously, but mostly on the Mexican side,” he said. “Investment flows have gone up enormously, but almost entirely on the Canadian side. So we probably want to take a look at what we can do to grow some of those things more in a more balanced way."

According to the Prime Minister's Office, Canada imported $25.5 billion from Mexico in 2012, while Canada exported only $5.4 billion to Mexico.

Harper and Pena Nieto will be joined by U.S. President Barack Obama in Toluca on Wednesday for the annual North American Leaders' Summit.

The meeting has long been dubbed the "Three Amigos” summit, but in recent years, it’s been a little less than cozy, said Carlo Dade, director of the Centre for Trade and Investment Policy at the Canada West Foundation. Dade specializes in Canada-Latin American relations.

“In the decade or so I’ve been following North America, I don’t think I’ve ever been more depressed about the state of relations,” he told CTV’s Power Play earlier this week.

“The Mexicans are mad at us in Canada; we’re mad at the Americans; and the Americans seem to have had in up to here with both of us. It’s hard to see anything positive coming out of the summit.”

Mexico continues to resent the Canadian government’s refusal to lift a visa requirement for visitors from Mexico. Canada is not pleased that the U.S. still has not issued a decision on the Keystone XL pipeline. Washington has also dragged its heels on replacing the aging Ambassador Bridge between Windsor and Detroit. The U.S., meanwhile, would simply like to focus on expanding U.S. trade.

Dade said the visa issue has caused a big rift in relations between Canada and Mexico.

“It’s hard to understate the degree of anger in Mexico about this... The man on the street in Mexico doesn’t pay much attention to this, but in the circles that matter – business circles, diplomatic circles – it’s been a huge setback to the relationship,” he said.

The visa requirements were put in place in 2009 in a bid to cut the number of false refugee claimants. But former Canadian diplomat Colin Robertson said it’s clear that the need for the visas ended long ago.

On Tuesday, Harper would not commit to a timetable for lifting the visa requirement.

“We have clear criteria in Canada, why we do or do not have visas,” Harper said. “It’s based on security criteria of national and public security, and illegal migration.”

Pena Nieto said the two men discussed the issue, and he is encouraged by Harper’s “willingness to continue the dialogue.”

University of Alberta politics professor Julian Castro-Rea said the number of Mexican visits to Canada has fallen by as much as 80 per cent, by some estimates, because the visa application has been cumbersome, time-consuming and intrusive.

“It has sent a signal to the average Mexican that Canadians don’t like them, and that is not a good sign for the health of the bilateral relationship,” he told CTV News Channel Tuesday.

Before Harper left for Mexico, his office issued a statement hailing "70 years of excellent diplomatic relations” and “excellent bilateral relations.” But Mexico’s ambassador to Canada, Francisco Suarez had a different point of view.

Earlier this month, he characterized Mexico’s relationship with Canada as “stagnant,” expressing dissatisfaction that the two countries have not been able to move their economic relationship beyond the North American Free Trade Agreement, and telling students at Carleton University that relations have moved to a “mature, dignified old age with flaws, limitations and increasing wrinkles on their face.”

Photos

Prime Minister Stephen Harper takes part in a joint press conference with Mexican President Enrique Pena Nieto at the National Palace in Mexico City, Mexico on Tuesday, February 18, 2014. (Sean Kilpatrick / THE CANADIAN PRESS)

Prime Minister Stephen Harper takes part in a joint press conference with Mexican President Enrique Pena Nieto at the National Palace in Mexico City, Mexico on Tuesday, Feb. 18, 2014. (Sean Kilpatrick / THE CANADIAN PRESS)